E sccr/20/2 Rev Original: English date : May 10, 2010 Standing Committee on Copyright and Related Rights Twentieth Session Geneva, June 21 to 24, 2010

Competition between platforms/operators minimal – most markets are served by 1 2 operators), with a subsequent minimal effect of competition on consumer prices;

Cost of access to pay TV services remains the key barrier in many countries. Despite high per capita GDP in certain markets, relatively high levels of income inequality are present and inhibit overall affordability of TV;

Multitude of FTA satellite signals, but minimal foreign language (non Arabic) content targeting expatriates;

Limited availability of content – due to lack of technology, strict censorship laws – forcing consumers to look elsewhere;

Broadband penetration low due to high access prices – lack of legal online services targeting consumers;

Unauthorized signal access via smart card piracy and extra territorial access common due to historical lack of regulation and regulation enforcement;

Government apathy towards piracy in some countries, with copyright and broadcast rights not a key priority;

In other countries (UAE, Saudi Arabia, Kuwait), recent changes in regulation and increased enforcement is starting to act as deterrent.

229 In spite of the high penetration of TV sets in households – between 85 95 per cent and in line with those seen in developed nations in Europe and North America – a majority of Middle Eastern countries display low levels of pay TV penetration. Higher than average disposable incomes combined with zero/low taxation structures in many of the Middle Eastern countries have all been attributed as underlying reasons for high TV penetration, but this does not seem to have translated into increased take up of paid services. On the contrary, pay TV penetration for the MENA (Middle East North Africa) region is a mere 8 per cent, while unauthorized access of broadcast signals and piracy has been reported as being rampant by stakeholders.

230 Pay TV services in the region are available only from a handful of service providers, the largest of which   Orbit Showtime and ART   are pan MENA satellite pay TV operators. Other localized service providers include Du (UAE - IPTV), E-Vision (UAE - Cable), Mozaic TV+ (Qatar – IPTV) and Neu TV (Bahrain – IPTV), many of whom are also resellers of the Orbit Showtime or ART channel packages. In most markets, competition between services is limited to a maximum of three, maybe four, providers, indicating that (consumer level) price based competition between operators is typically low.

231 Cost of access – seen in many regions as a key barrier to pay TV access – remains the prime barrier in the Middle East. Basic pay TV services from satellite operators and local cable/IPTV operators are priced from €10-€15. A notable exception is Qatar, where basic access prices from local operator Mozaic TV+ are much higher, starting at €45. Cost of access to premium content (sports and movies) ranges from €35 €45 for the satellite operators and €50 €75 for the local operators – indicating that costs incurred by consumers while acquiring additional premium packages go up by 65 250 per cent, depending on the operator and country.

232 When compared to per capita monthly GDP, basic pay TV access accounts for approximately 0.5 1 per cent and access to premium packages range from 2.5-4 per cent. While on the face of it, access costs as a percentage of monthly per capita GDP are comparatively low when compared to other regions, these figures do not take into consideration the large disparity in household incomes in these countries. A direct result of these countries’ wealth from natural resources has been the influx of foreign nationals, who form a large majority of the workforce (skilled and unskilled). In UAE alone, 80 per cent of the country’s population was made up of expatriates in 2005⁷³. Recent census reports from the UAE highlight the income disparities quite well – with the reports indicating that the household incomes of UAE nationals are more than twice that of non nationals⁷⁴. Similar conditions can also be seen in other Middle Eastern countries, especially among GCC (Gulf Cooperation Council) members.

233 Although a plethora of FTA satellite channels serving the Middle Eastern countries exist⁷⁵, distribution of premium and non Arabic language content is by and large limited to pay TV channels available from the region’s handful of operators, and primarily from satellite operators, ART and Orbit Showtime – resulting in limited competition between operators, and a relatively limited diversity in the content supplied. In recent months, some key rights to events such as the English Premier League (EPL), which were previously held by pay TV operator Showtime, have been obtained by FTA broadcasters such as ADMC (Abu Dhabi Media Company). However, these channels are now likely to be encrypted as part of the deal between the ADMC and EPL, and will most likely be distributed via the region’s pay TV operators.

234 Similarly, a large majority of the FTA channels available via satellite cater to the Arabic speaking population in the MENA region - resulting in the exclusion of the non Arabic speaking population, for whom free TV services via both satellite and terrestrial are largely limited. Although services are available via the ‘Pehla’ (Asian/Indian sub continent focus), ‘Showtime’ (Western focus) and ‘Pinoy’ (Philippines focus) packages offered by ART and Orbit Showtime, and are commonly resold by other operators in most Middle Eastern countries, in many cases, costs of access to these services are prohibitive to population/households in the low and even lower-middle income strata – to which large sections of the expatriate population belongs.

235 Regulations governing content availability are relatively strict in the Middle East, and content that is un-Islamic is not allowed in many markets to be distributed. This includes both broadcast content and movies released in cinemas in the region, which go through a strict censorship process. In Saudi Arabia, for instance, there is a complete ban on the presence of cinemas – forcing consumers to either view movies when they become available (legally) on TV channels (FTA/Pay), or when they become available via the limited number of legal video stores that operate in the country. In most cases, consumers tend to prefer the pirated, often uncensored, copy that arrives in the market prior to the movies being released via the TV/home video window. Although regulations in other Middle Eastern markets are not as severe as those of Saudi Arabia, similar censorship laws exist – considerably delaying the availability of legal content via cinemas and pay/free TV, and forcing consumers to look towards other illegal sources for satisfying their entertainment requirements. Similarly, when compared to Europe and the US, breadth of legal online video services available in the region is limited – restricting the options available to broadband subscribers and owners of portable media players.

236 Insufficient regulations – especially pertaining to online piracy - and less stringent enforcement of existing regulations have been quoted as being one of the key causes for the rapid growth of unauthorized access and piracy in the region by content owners, broadcasters and pay TV operators. However, stakeholders dealing with piracy in the region have been largely positive about the steps taken by the various governments in the GCC region of the Middle East in tackling piracy. Notable examples are UAE – which has been handing down deterrent custodial sentencing and fines to pirates (online, physical and hardware), and also working towards shutting down websites and servers hosting unauthorized copyright content and IP addresses known to be distributing pay TV smart card key words. Saudi Arabia has also recently stepped up raids against sale of physical pirated goods in open markets, and has been blocking access to websites known to be distributing copyright infringing material. Similar steps have also been taken in Kuwait. Several countries in the region have also banned the import of STBs that have Ethernet ports, in a bid to stem the increase in card sharing/keyword sharing piracy. In other parts of the Middle East (Iraq, Jordan, Lebanon and Syria) and North Africa (Algeria, Morocco, Tunisia), although authorities have made efforts in recent years to combat piracy through conducting raids, stakeholders continue to hold the view that both regulations and its enforcement continue to be less stringent, as a result of which piracy continues relatively unabated.